November 20, 2008
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Tech Sector To Burst Again?

Technology businesses "cannot fight the downward tug of economic gravity."
Wednesday, November 19, 2008

(UPI) – The U.S. technology sector can expect a downturn, but not one as dramatic as the dot.com bust of 1995 through 2001, experts said.

Industry analysts at Gartner project growth in the sector under 3 percent in 2009, down from an earlier projection of 6 percent, USA Today reported Wednesday.

Experts at International Date Corp. project similar numbers for 2009, although Bill Whyman at International Strategy & Investment said technology businesses "cannot fight the downward tug of economic gravity."

While Intel and others have cut next year's revenue predictions, Whyman said worldwide spending on technology would fall to "mid-single digit negative."

Amid the gloom, the top-selling personal computer company Hewlett-Packard reported revenues of $33.6 billion in the fiscal quarter that ended Oct. 31, a 19 percent jump from the same period a year ago.

A large part of the jump came from a purchase of Electronic Data Systems while growth in HP's established businesses was around 5 percent, the newspaper said.

Experts also say one segment of the industry may be recession-proof.

Video game sales grew 18 percent in October over the same month of 2007.

"People getting laid off need something to do," one expert said.

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